Q: How similar should the architecture and design of my second store be to my first?

We’re in a really huge shift in the way we do second locations, and customers’ particular tastes have changed. You’re really seeing the customers’ tastes be that if he doesn’t want to go to the Ruby Tuesday, which is the same everywhere, or even the McDonald’s, the customer’s tastes are, “I want my uniqueness, I want my neighborhood feel, I want something special.” That’s why you’re seeing some real struggle with restaurants trying to go out and duplicate what they had and it not being successful. You also don’t want to duplicate exactly because it’s really hard to do.

People like a lot of energy, so you’re trying to create lots of that where it’s fun. Five Guys really works on the energy. I’m not so sure that as you get more of those the novelty is still going to be there, because they’re trying to be really specific in every unit looking alike, and I think that’s probably going to bite them at some point.

You’re better off doing a little differentiation in your second store. It’s very hard to duplicate that first image and experience if it’s really doing well.

For the restaurant’s exterior, you may want certain similarities so customers recognize it as brand X, and the signage and the logos are key. After that, the customer seems to be going toward, “I recognize the name, but I want it to be a different experience.” So much depends, too, on if you have that lake or riverfront or that outdoor patio experience that gives you something that is really nice for that location. So you’d want to customize it even more in that direction.

You can always put twists in the design. The key is to determine the parameters: How far can you push it? Maybe the shopping-
center building regulations say all the awnings have to be black. Well, maybe I can do my awnings a little different. We did one restaurant in Augusta, Georgia, that had to be brick, but we were able to turn it into a dark brick in a herringbone pattern below the windows. It starts to get some differentiation in there and still maintain the architectural flavor of the place, so you can push a few things there.

We did one in Huntsville, Alabama, where the outside was already set, but again, we had some flexibility on the patio. We also had a little flexibility at the front door. So the real key was the inside and shifting it and making a whole different image inside than any of the other ones in the chain.

I think the real key to all restaurants is lighting. The lighting, and the atmosphere created with the lighting, really makes your restaurant more spectacular. It can’t be overemphasized how important it is to focus on how you are lighting the place and what you are creating. It gives you the flexibility to change spaces from evening to night. The last thing you want is even lighting—you want uneven lighting in restaurants.

It’s really gotten to where, in the whole restaurant industry, there’s not much secret in the food anymore. You can add a little twist to it, but the people have certain things they all eat and all like and you’re kind of stuck with them on your menus, so your differentiation is the experience inside. A lot of it is always building that energy, building that activity, whether you’re fast food or whether you’re fine dining.

“You’re really better off doing a little differentiation in your second store. It’s very hard to duplicate that first image and experience if it’s really doing well.”

A great example is the Lettuce Entertain You group in Chicago. There are similarities in each of their restaurants, but there’s enough differentiation where the general customer probably doesn’t even recognize them as part of a chain. They execute extremely well.

There is a contrast between a Five Guys and Lettuce Entertain You. If you go into each of them, they’re frantic and they’re doing well. But the Five Guys is probably going to falter some because it’s doing too much exactly alike. As soon as they get a whole bunch of them, customers will say, “Well, I’ve already been there a bunch of times.”

Each location needs to be unique and special. People are really into the neighborhood thing, and in this economy people aren’t moving around as much, so their neighborhood becomes more important to them. They’re not traveling as far to go out to eat. They’ve scaled back, so again, it’s, “This is my place. I want this comfort level. If I’m out on the road and I see the same name, I don’t want to go to that place because I have it at home. I want to go to something different.” So if you don’t change it, you’re hurting yourself.

In the next couple years, you’re going to see even more changes in design, and anything being exactly like the last 20 is not going to have much popularity. There are too many good choices out there, and what differentiates a restaurant is the localness of it.

If you have one unit of a concept per city, then you’re fine—you’re the unique one in that city. But as soon as you start doing multiple units within easy driving range, you really have to differentiate inside and make it special if you’re going to grow.